Receiving inheritance money when you are on UC

Grumpy_chap

Levatorani123 said:

Grumpy_chap said:

Does the Will of the deceased stipulate your partner as the Beneficiary, or does the Will of the deceased stipulate your 3 children as the Beneficiaries?

 My Partner.

 We were planning to do this anyway, as we had to use their child savings account money from a relative who previously had stipulated money for children to pay for food when I first became unwell.( longer story).

It may not be as simple as just putting the money back into the children's accounts, or even opening the child-ISA's quickly.

Gifting the money received from the inheritance to your children will almost certainly be considered as Deprivation of Assets.

If you have debts and repay them, that is not DoA. 

However, repaying a debt to your children would require that there was evidence of the money having been lent to you and a genuine debt to be repaid.  That evidence is really unlikely to exist.

There are others that will be better informed than I am, but I understand (from previous threads on this forum) that there are circumstances where money held in a child's name but still accessible by the parents is still considered to be the parent's asset.
(This makes sense otherwise there'd be loads of parents claiming UC being bought a shiny Range Rover every couple of years by the children.)

It is worth understanding the detailed rules around money accessible by the parents but in a child's account.  The worst case scenario would be that attempting to repay the loan back to the children would draw attention to the funds and the value held then reassessed as parent's asset and potential review of prior UC calculations.  I do not know how likely that would be.  As I have already mentioned, child's saving but accessible to parents is complex and hopefully someone more knowledgeable than I can clarify the rules in this scenario.

One final thing, you mentioned that you have a disability so some of your benefits may not be means-tested.


EDIT - Here is an article that explains about child savings that are accessible by parents:
https://talkaboutmoney.org.uk/blog/welfare-benefits/universal-credit-and-children-s-savings

Levatorani123

Grumpy_chap said:

Levatorani123 said:

Grumpy_chap said:

Does the Will of the deceased stipulate your partner as the Beneficiary, or does the Will of the deceased stipulate your 3 children as the Beneficiaries?

 My Partner.

 We were planning to do this anyway, as we had to use their child savings account money from a relative who previously had stipulated money for children to pay for food when I first became unwell.( longer story).

It may not be as simple as just putting the money back into the children's accounts, or even opening the child-ISA's quickly.

Gifting the money received from the inheritance to your children will almost certainly be considered as Deprivation of Assets.

If you have debts and repay them, that is not DoA. 

However, repaying a debt to your children would require that there was evidence of the money having been lent to you and a genuine debt to be repaid.  That evidence is really unlikely to exist.

There are others that will be better informed than I am, but I understand (from previous threads on this forum) that there are circumstances where money held in a child's name but still accessible by the parents is still considered to be the parent's asset.
(This makes sense otherwise there'd be loads of parents claiming UC being bought a shiny Range Rover every couple of years by the children.)

It is worth understanding the detailed rules around money accessible by the parents but in a child's account.  The worst case scenario would be that attempting to repay the loan back to the children would draw attention to the funds and the value held then reassessed as parent's asset and potential review of prior UC calculations.  I do not know how likely that would be.  As I have already mentioned, child's saving but accessible to parents is complex and hopefully someone more knowledgeable than I can clarify the rules in this scenario.

One final thing, you mentioned that you have a disability so some of your benefits may not be means-tested.


EDIT - Here is an article that explains about child savings that are accessible by parents:
https://talkaboutmoney.org.uk/blog/welfare-benefits/universal-credit-and-children-s-savings

Yeah, my PIP isnt means tested  I believe.

We have debts that we have incurred as a couple but that are in my name if you get me.

Or does it specifically have to be debts in her name?

Im a little confused and not sure what to do when she gets the money now regarding UC.

Thanks.

KxMx

You are best off speaking with a trained welfare rights advisor. 

itsthelittlethings

I would think you might get away with paying your children back the money you borrowed from them but I think you need benefits advice.

Muttleythefrog

I presume you cannot pay her debts with a credit card of yours? If you could then paying your credit card debt becomes possibility. (I'm scrambling in my brain to see why you couldn't just pay off her debts directly anyway as a joint consideration as couple for benefit purposes but I note advice on previous page may conflict). Would the debt repayment be significant in bringing down the capital? I agree that this situation seems difficult to arrange such the DoC is not considered if using children as vehicle to move inheritance to unless that is directed specifically in will. Yes PIP unaffected by capital or income.

Keep_pedalling

I don’t think partying off the debts will be DoA as you are assessed as a couple for savings so that applies to debt as well.

How about paying off the debt, then start the putting what you would be paying for the debt into regular payments to new children’s JISAs?

Spoonie_Turtle

I don't/didn't understand why it would matter whose debt it technically was.  The money affects your joint claim, it is assessed as belonging to both of you for UC purposes, so as long as the debt is in at least one of your names.

So I went and had a look at the legislation and I'm none the wiser really - it depends on how 'person' applies in joint claims where the capital affects the claim.

"Notional capital

50.—(1) A person is to be treated as possessing capital of which the person has deprived themselves for the purpose of securing entitlement to universal credit or to an increased amount of universal credit.

(2) A person is not to be treated as depriving themselves of capital if the person disposes of it for the purposes of—

(a)reducing or paying a debt owed by the person"

THAT SAID.

You could pay off your debt (or some of it) with your existing savings, which would definitely be fine whilst your total is below 6k and should still be fine once your partner inherits anyway as you say 'we' have 3k.

All of this is assuming your partner inherits the top end of the estimated amount to take you over the 16k.  There may be benefit to paying off (some of) the debt even if she inherits up to 13k, because you don't really want to be very near the 16k threshold and then be accused of going over if benefit payments in any month took your overall total over.  (Your capital won't have gone over but the team that deals with it seem to be a bit rubbish at knowing the difference between income and capital.)

But if she inherits the lower end of the estimate, c.10 or 11k, you won't be near the 16k threshold and nothing needs to be done.

Levatorani123

Ok thanks, yes I didnt think about that. If we are being assessed as a couple then I could pay off  debts in my name that are ours I guess.

They total around 3k.

TELLIT01

As the OP clearly had access to the funds given to the children it's probably that DWP would expect that to be included in the figure supplied to them for total capital/savings.  If that amount took the figure to over £6k it could affect the amount of UC received.

HillStreetBlues

itsthelittlethings said:

I would think you might get away with paying your children back the money you borrowed from them but I think you need benefits advice.

An issue with that route is would the children legally be able to lend the parents the money, if the parents took it without that consent then it's theft.

More likely that the money was spent on the children's needs, EG not making them homeless or buying food or clothes, that  would mean the money isn't repayable.

I agree on needing expect benefit advice.